Macro outlook

December 5, 2007

I am testifying before the House Budget Committee this morning on economic conditions and the budget. CBO will not be releasing an updated macroeconomic forecast until January, when we release our next Economic and Budget Outlook, so the testimony doesn't have any specific projections for the macroeconomic outlook. Nonetheless, the testimony does discuss many of the cross-cutting factors affecting the macroeconomy -- including difficulties in the housing market, the stabilization of the current account, turbulence in financial markets, oil price trends, and consumer confidence.

Marty Feldstein and Fred Bergsten are also on this morning's panel. You can view the hearing through the House Budget Committee website.

CBO's testimony was put together by our Macroeconomic Analysis Division, which is responsible for economic forecasting, policy analysis, and financial analysis of federal programs and is directed by Bob Dennis (who has been with CBO since 1979).

On the topic of macroeconomic forecasts, we have long evaluated our own forecasting accuracywith the thought that publishing such analysis of our own projections is an important form of transparency. And I was interested to learn from a paper released by two Federal Reserve economists on November 19 that CBO's record on macroeconomic forecasting looks quite good, even compared to the Federal Reserve's own outstanding (and larger) staff. So kudos to our macro division!